Carbon capture and sequestration (CCS) is a highly effective means of reducing carbon dioxide (CO₂) emissions and mitigating climate change. This process, which has been utilized for decades, involves capturing CO₂ from sources like natural gas-fired power plants and then transporting it to underground storage facilities. The captured CO₂ is stored or sequestered in pore spaces of subsurface formations. A “pore space” in this context is typically defined as a subsurface cavity or void, whether naturally or artificially created, that can be used as a storage space CO₂.
Because pore space lies beneath the surface and often contains (or contained) oil, gas, coal, or other minerals, the issue of who has rights to the pore space has been at times a contentious issue, and the U.S. legal landscape on the subject is varied. This article addresses some of the confusion for securing rights for CCS projects in a few key states as 2024 comes to a close.
Pennsylvania: On July 17 of this year, Governor Josh Shapiro signed into law Pennsylvania’s Carbon Capture and Sequestration Act of 2024 (the “PA CCS Act”), which directs that immediately upon enactment, pore space ownership in Pennsylvania vests in the “surface property interest owner above the pore space.” [1] This would appear to be a significant diversion from the common law rule established by the Supreme Court of Pennsylvania in 1983 in United States Steel Corp. v. Hoge that methane gas embedded in a coal seam belongs to the owner of the coal;[2] however, the Court noted that the coal owner’s interest reverts to the surface landowner after the coal is removed. Nevertheless, the PA CCS Act of 2024 attempts to marry the two approaches with §696.4(d)(2) which states, in relevant part:
For the purpose of determining the priority of subsurface uses between a mineral, including coal, or oil and gas estate and pore space, the mineral, including coal, or oil and gas estate is dominant, including the surface use necessary for the subsurface development of the mineral, including coal, or oil and gas estate, regardless of whether ownership of the pore space is vested in the surface property interest owner or is owned separately from the surface.[3]
West Virginia: Unlike its neighbor across the Mason-Dixon line, in Tate v. United States Fuel Gas Co., the West Virginia Supreme Court of Appeals ruled in 1952 that the surface owner holds title to the subsurface space for natural gas storage and could therefore grant storage rights as long as there were no recoverable minerals in the stratum.[4] The Court noted, however that the mineral estate owner’s right to extract the minerals takes precedence over the surface owner’s storage rights.[5] On March 1, 2022, West Virginia codified these principles by enacting H.B. No. 4491 which clearly states that the title to pore space in all strata underlying the surface of lands and waters is vested in the surface owner. In particular, §22-11B-18(e) preserves the dominance of the mineral estate by directing: “In the relationship between a severed mineral owner and a pore space estate, this article does not change or alter the common law, as it relates to the rights belonging to, or the dominance of, the mineral estate.”[6]
Texas: The issue of pore space ownership in Texas remains unresolved. In Emeny v. U.S.,[7] a federal court affirmed surface owners’ rights to store gas in subsurface spaces, a view echoed in 1974, by the Texas Supreme Court in Humble Oil Co. v. West.[8] However, less than 20 years later the Texas Supreme Court ruled in Mapco, Inc. v. Carter that the mineral estate owner controls storage spaces, especially those created through mineral extraction.[9] Then again in 2017, the Court upheld a lower court’s determination that the surface estate includes “the geologic structures beneath the surface.”[10] Despite this conflicting case law, the general sense is that Texas will follow the trend that pore space ownership vests with the surface owner; subject, however to the rights of the mineral estate, but only legislative action can make that certain.[11]
Oklahoma: Unlike the other states mentioned in this analysis, Oklahoma has held the position that the surface estate owner has the right to grant leases for subsurface pore spaces since 1941. In Sunray Oil Co. v. Cortez Oil Co., the Oklahoma Supreme Court held that mineral grants do not include the right to store resources in subsurface pores.[12] Oklahoma’s Title 60, Section 6, enacted in 2011 clarifies that pore space is real property belonging to the surface owner unless separately transferred, without altering mineral rights. The law has not been court-tested but positions Oklahoma as a leader in pore space ownership legislation, especially considering Oklahoma’s active oil and gas industry.
While only about nineteen states have dealt with CCS or pore space ownership in some capacity, only a small handful of states have conclusively decided on the issue. Of the undecided states, a majority are trending toward the surface owner having pore space ownership. Despite progress in some states, further legislative and judicial clarity is needed to facilitate the expansion of CCS initiatives and answer remaining questions.
[1] 32 Pa. Stat. Ann. § 696.1, et seq. (West).
[2] “Such gas as is present in coal must necessarily belong to the owner of the coal,” 503 Pa. 140, 147, 468 A.2d 1380, 1383 (1983).
[3] 32 Pa. Stat. Ann. § 696.4 (West).
[4] 137 W. Va. 272, 71 S.E.2d 65 (1952).
[5] Id.
[6] W. Va. Code Ann. § 22-11B-18 (West).
[7] Emeny v. United States, 412 F.2d 1319 (Ct. Cl. 1969).
[8] Humble Oil & Ref. Co. v. West, 508 S.W.2d 812 (Tex. 1974).
[9] 817 S.W.2d 686 (Tex. 1991).
[10] Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39, 46–47 (Tex. 2017).
[11] Muriel Hague, A Hitchhiker’s Guide to Carbon Capture and Sequestration Regulation in Texas and Beyond, 61 Hous. L. Rev. (2024).
[12] Sunray Oil Co. v. Cortex Oil Co., 112 P.2d 792 (Okla. 1941).